Democratic Republic of São Tomé and Príncipe : Joint Bank-Fund Debt Sustainability Analysis, 2018 Update
São Tomé and Príncipe is classified as being in debt distress according to this joint World Bank-IMF low-income country debt sustainability analysis (DSA). This assessment has changed from the previous DSA completed in December 2017 (high risk of e...
| Main Authors: | , |
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/502321537342625907/São-Tomé-and-Príncipe-Joint-Bank-Fund-Debt-Sustainability-Analysis-2018-Update http://hdl.handle.net/10986/30528 |
| Summary: | São Tomé and Príncipe is classified as
being in debt distress according to this joint World
Bank-IMF low-income country debt sustainability analysis
(DSA). This assessment has changed from the previous DSA
completed in December 2017 (high risk of external debt
distress) due to the prolonged negotiations on rescheduling
external arrears. Nonetheless, São Tomé and Príncipe’s debt
ratios have improved since the previous DSA. Specifically,
the ratio of the present value of public and
publicly-guaranteed (PPG) external debt to gross domestic
product (GDP) no longer exceeds its threshold under the
baseline scenario, due to lower-than-expected loan
disbursements in 2017, an appreciation of the euro vis-à-vis
the U.S. dollar, and higher-than-expected GDP deflator
growth. As in the previous DSA, the debt service ratios stay
below their respective thresholds under almost all
scenarios. Nevertheless, the ratios of the present value of
debt to exports and to revenue still exceed their respective
thresholds under the baseline scenario early in the
projection period, though they decline over time. This DSA
underscores the importance of lowering all PPG external debt
indicators below their thresholds by continuing fiscal
consolidation, eschewing non-concessional loans, promoting
growth, and expanding the export base. |
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